Mondi sees strong operational profit growth in full year 2018
2 March 2019
In the 2018 financial year, Mondi benefited from good demand across the fibre packaging businesses, higher average selling prices and the contribution from recent acquisitions.
The group's revenue of €7.48bn was up 5 per cent on the prior year. Operational profit (€1,19bn) and net profit (€866m) were up by more than 20 per cent compared to the previous year.
The company's input costs in 2018 were generally higher than in 2017, mitigated by ongoing cost reduction initiatives. Caused mainly by Chinese import policies, average benchmark costs for recovered paper were down 33 per cent on the prior year.
The Fibre Packaging division posted volume growth, driven by previously completed capital investment projects, operational improvements and strong organic volume growth in the industrial bags segment. Consumer packaging volumes were impacted by the company's targeted approach to exit lower margin business and a decline in volumes in personal care components.
While volumes in the Uncoated Fine Paper business were up year-on-year, market pulp and newsprint volumes were negatively impacted, respectively, by the extended shut at Richards Bay mill in South Africa and the strategic decision taken in the prior year to exit the newsprint market in South Africa.
According to Mondi's estimates, European uncoated fine paper demand declined around 4 per cent on a strong prior year period. Despite this market shrinkage, the company's uncoated fine paper sales volumes were 1 per cent higher than the prior year.